Oracle has scooped up RightNow Technologies, a cloud-based customer self-service application vendor, for a reported US$1.5 billion. The acquisition price is a hefty 20 percent premium over RightNow’s closing price last week.
The acquisition fills a missing gap in Oracle’s cloud-based CRM functionality. The deal also provides an excellent exit strategy for RightNow, especially as competition continues to become more intense in this space, Nucleus Research Vice President Rebecca Wettemann told CRM Buyer.
“Now it will have the opportunity to continue to grow, and at a much faster pace than it could have on its own,” she said.
Oracle and RightNow did not respond to CRM Buyer’s requests to comment.
The Mid-Market Play
The acquisition will considerably beef up Oracle’s mid-market bona fides, Wettemann noted. “Having RightNow will give Oracle a broader base to compete for customers against Salesforce.com. RightNow is also better priced for the mid-market.”
Finally, RightNow’s application is far less labor-intensive than the traditional Siebel or Oracle offerings, she pointed out.
Fighting Salesforce.com
Of all of these, Oracle probably is most appreciative of the competitive boost it will receive as it goes up against Salesforce.com, said Scott Kolman, senior vice president of marketing for Speech Cycle.
“The reality is Oracle has struggled in its quest to compete with Salesforce.com in offering Software as a Service-based CRM solutions,” Kolman told CRM Buyer.
In general, Oracle has not been as successful in adding new customers to its Oracle On Demand product, whereas RightNow has been very successful, he said.
Then Salesforce.com stepped up the competition even more, by expanding into customer care and different niche social media platforms. Oracle, in short, had to do something.
Integration Issues
Oracle will have to integrate RightNow’s platform into its own offering, of course, to take full advantage of the company’s strengths. For a master acquirer like Oracle, that shouldn’t be a problem in the long run. In the short run, though, users may experience some glitches.
“From a technology landscape perspective, RightNow is .Net, and Oracle is Java,” Mitch Lieberman, VP of strategy for Sword Ciboodle, told CRM Buyer. “That is going to disrupt RightNow customers drastically at some point.”
“It will be interesting to see how Oracle integrates the RightNow acquisition with its core tools,” added Ed Shepherdson, senior vice president for enterprise solutions at Coveo.
For a space like self-service, though, integration is more than just a melding of disparate technologies and platforms, Shepherdso told CRM Buyer.
“This is a case where a company has to also leverage and incorporate the knowledge and insight of the acquired company for the technology to truly work well,” he explained.
That is because the self-service channel is the one that customers care about the most — and oftentimes is the only interaction they might have with a brand, Shepherdson said.
The Public Cloud
Still, Oracle is probably the one company that can claim a headstart in having the proper foundation for this type of acquisition.
It made a splash in the cloud computing space a few weeks ago, when it debuted Oracle Public Cloud — a new tech stack that ofers customers access to Oracle Fusion Applications, Oracle Fusion Middleware and Oracle Database, all of which are managed, hosted and supported by Oracle.
This new cloud offering, which runs on Oracle systems, also includes Oracle Fusion CRM, HCM, Social Network, Java and Oracle Database Cloud service.
In short, it offers several different business applications via the cloud. Presumably, self-service should be easy enough to add to the mix.
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